From Bankruptcy to Brisbane: How and why Kodak cameras are back in the Australian market

The famous Kodak brand is returning to retail during the second half of 2014 with new fixed lens cameras, action cams and projectors being rolled out through new Australian distributor E3 Style.

Following its resuscitation from Chapter 11 in the United States last year, the publicly traded Eastman Kodak company pivoted from manufacturers of consumer goods to a brand licensing and professional equipment company, using trademark litigation and division sell-offs to fund a return from bankruptcy. A key component of this Lazarus act was to sign a “brand licensing agreement for consumer digital products” with JK Imaging, an unusually obscure company barely registering an imprint on the internet.

A Miami-based American named Joe Atick is the CEO of JK Imaging and the chairman of its parent company, JA Capital. His LinkedIn page claims he was formerly the president of Jaacx Distributors for 18 years and that his vendor base included Sony, Olympus, Philips, Panasonic, Lexar and GE during this time. According to its website, Jaacx focuses on name brand and OEM brand wholesaling into Latin American countries.

Some digging around by respected rival hack Keith Shipton at PhotoCounter determined that JK Imaging was an “unknown start-up” and Shipton’s enquiries led him to question the design and manufacturing credentials of this this new global licensee. JK Imaging’s Kodak-specific website defaults to Chinese when accessed from Australia and employee email addresses show jkimagingltd.com as the domain, which displays a “This site is under construction” message.

Fast forward six months and Austin Kazami, JK Imaging’s director of sales and marketing, and David Berthelsen, national brands manager at E3 Style, are hosting media in a suite at the Rydges North Sydney. Kazami explains that JK Imaging has a 10-year agreement with Kodak to manufacture and wholesale products in six categories. Four of them are traditional: digital cameras, video cameras, Pico projectors and home theatre projectors; while the remaining two are relatively niche: “laser range finders” and “rifle scopes”.

Kazami also explained for the first time how JK Imaging will be fulfilling its manufacturing obligations. The company has partnered with Asia Optical, a manufacturer traded on the Taiwan stock exchange that specialises in smartphone lenses, as well as other optics, with factories in Shenzhen, Shanghai and Dongguan in China. Asia Optical’s most recent financial records show it recorded a net profit of AU $4.5 million for the six months to 30 June 2013, which was a big improvement on the AU $13.3 million loss it recorded for the year ago corresponding period.

Kazami said Asia Optical was currently manufacturing lenses for leading smartphone brands, though he did not reveal which ones. Asia Optical is not listed on Apple’s 2014 Supplier List, and an internet search to locate confirmed partners has not borne fruit (other manufacturers do not appear to release lists, a la Apple). One thing that was unearthed, however, was that Kodak has previously and successfully sued Asia Optical in the United States District Court to recover royalties on its patents, which had been infringed digital cameras OEMed by Asia Optical for Fujifilm.

Kazami said that JK Imaging’s vision for Kodak is to have Asia Optical manufacture digital camera products that suit the smartphone zeitgeist. Fixed lens digital camera sales have declined sharply due to the proliferation of smartphones — he showed a slide with unreferenced data showing volume sales at their lowest level since at least 2006 (see Appendix below) — all the while, however, the number of photos taken and shared on social media has exploded in popularity. People haven’t grown tired of photography, just of cameras.

Because Asia Optical specialises in smartphone lenses, Kazami claimed, it has the inside running on what the leading handset brands will be offering, so Kodak can produce and release cameras that complement rather than duplicate the functionality of a mobile phone. Consumers are demanding larger and wider lenses that can take long distance images with clarity, cost-effective action cameras with broad feature sets, Wi-Fi connectivity for instant sharing, digital imaging ‘appcessories’ and 360-degree video recording.

(JK Imaging is also producing a Kodak-branded range of Micro Four-Thirds cameras — the same open source system co-developed and used by Olympus and Panasonic — but there are no plans to release these compact system camera models in Australia.)

There will be five new Kodak product series in Australia out of JK Imaging:

Astro Zoom: eight SKUs ranging from 25x to 65x optical zoom

Friendly Zoom: four colourful models point and shoot models targeting the entry-to-mid level

Smart Zoom: three lenses that attach to a smartphone and are controlled via an iPhone or Android app

Action Zoom: one rugged video camera in the GoPro mould, one tough point and shoot model and a new concept 360-degree camera for including the user as well as the surroundings in action photography.

iShow: a Pico projector.

Kodak’s flagship Astro Zoom model is the 65x zoom AZ651 (RRP $449).

These new series will be distributed in Australia by Brisbane-based wholesaler E3 Style. Kodak joins a very eclectic mix of brands now licensed by E3 Style for distribution, including Batman, Family Guy, The Smurfs and Motorola. The company specialises in furnishing retailers with predominately entry level OEM products affixed with a recognisable brand, often from the entertainment industry, in order to differentiate the goods from similar but unbranded rivals.

David Berthelsen, national brands manager at E3 Style, joined the company in February 2014, shortly after the Kodak account was secured. Although he wasn’t involved in the process, he was able to explain why E3 Style applied for the business.

“We pitched hard for the business,” he said. “We [were performing] very strongly in cameras, but it was more kids cameras and action cameras, and we became the highest rung turner in that market, we were knocking off a lot of bigger brands, with a lot of home brands, white label and OEM stuff.

“We knew we could open doors for cameras — we have good relationships across the retail base — and we thought it would be a good idea to step up and do a branded product, and that’s how the relationship came to fruition.”

E3 Style beat out three other tenders for JK Imaging’s Kodak business — Kazami would not reveal their identities — in part because they had the inside running due to one particular longstanding relationship.

“It’s kind of like a personal connection,” replied Kazami when asked why E3 won the tender. “A man that worked at E3, I know him very well. I used to live in Australia and I worked with him at Olympus.”

Kazami refused to identify this person by name, but Appliance Retailer understands him to be Stephen Jacobs. Currently the national sales manager at Nespresso, Jacobs worked with Kazami at Olympus between 2002 and 2006. After stints at Dick Smith and Samsung, Jacobs worked at E3 Style from August 2011 to October 2013.

“There was a personal connection there and that’s what brought Kodak to us,” said Berthelsen.

Although the perception might be that this range is strictly chasing volume with models priced to move — ‘stack ‘em high, watch ‘em fly’, as the saying goes — there are actually some very attractive and well-featured models at competitive, rather than disruptive, pricepoints.

The Friendly Zoom range starts at RRP $79.95 for a basic 16-megapixel point and shoot model with 4x zoom and goes up to a 16-megapixel unit with 20x zoom for RRP $179. In Astro Zoom, Kodak has some market leading specifications, including a 65x optical zoom on a Wi-Fi-enabled model for RRP $449. In Action Cameras, Kodak’s flagship SP1 model is RRP $269 for the body only or $309 for the full accessories pack. This is significantly cheaper than comparable GoPro models, though Kodak does not have the marketing means nor the brand heritage to demand a premium price.

Where it is trying to carve out its own slice of the market is in 360-degree filming. Kazami showcased a prototype of a new action cam concept model called the SP360. Using a spherical lens design, this camera is able to film its complete surroundings, ostensibly meaning both the action and the participant can be recorded simultaneously. Using a bespoke video software suite, users can then edit the action using multiple templates.

Due to be retailed for around $500, Berthelsen said this camera “has so many applications above and beyond what a GoPro can do” but that it had to be merchandised differently to other more instantly saleable models in the range.

“We spoke to the retailers about it and we took it to them a few months ago to get feedback and start the conversation,” he said. “It’s such an interesting product but I think we need to be careful about where we put it because it needs to be sold, positioned and messaged properly, and failing that, it’s just a product sitting in a box on the shelf.”

“It’s definitely not a mass merchant product: it will die on the vine in those stores. It’s a work in progress but we’re confident we can get some good partners for this camera.”

While the SP360 is more of a specialist product, the remainder of the Kodak range is very much intended for broad retail consumption. Sources in the market say retailers have been consolidating their camera ranges because they have found themselves sitting on a lot of unsold inventory. As a result of this, retailers are only looking to review their camera ranges once or twice per year. Furthermore, cameras sales have become much more seasonal, especially in the fixed lens categories.

“Where we come in is at a difficult point in the market,” Berthelsen said. “I’ll be honest, it’s been difficult to get it in there, but it’s not a branding issue at all. There are definitely some opportunities around the lower end, with the mass merchants.

“We wouldn’t say no to anyone but we would be very specific about who got what cameras. At the end of the day, you don’t want to put a 65x lens into Big W because it is a big investment in stock and, really, they are not going to have the capability to sell it. That product would be in a JB or a Harvey Norman.

“Everyone wants to make sure they’ve got the right camera for the right demographic at the right price point.”

Kodak has definitely got a broad range of cameras suiting a diverse range of customers, with most attractively priced. For their sake, we hope burnt yellow comes back into fashion.

Kodak SL10 (RRP $229) turns an iPhone (or Android phone) into a much more sophisticated camera. The clips are adjustable to suit smartphones or varying widths.